Robert Maguire will soon be flush with cash.
Between the sale of MGM Plaza and part of the Solana office project east of the Dallas-Fort Worth Airport, MaguirePartners will realize a windfall of close to $160 million, which will be directed to Playa Vista, Gas. Co. Tower and several development projects.
“What MGM and several of these projects gives us is substantial liquidity,” Maguire said.
New York-based Tishman Speyer Properties is purchasing the million-square-foot MGM Plaza complex in Santa Monica for about $360 million. Although Maguire declined to comment on the return, sources peg the profit at about $100 million.
“It’s a real home run for us,” Maguire said. “From our perspective, it’s an extraordinary return.”
A partnership led by Maguire Thomas Partners (MaguirePartners’ predecessor firm) acquired the property in 1988, sold it to Douglas Emmett & Co. in 1996 for $227 million, but retained a small ownership interest and an option to buy it back at a specified price. Maguire exercised that option, repurchasing the complex a year later for $255 million.
Maguire said he plans to redeploy that capital on several projects, including increasing his stake in Playa Vista, where he is spearheading development of a 3.2 million-square-foot commercial campus.
“I’m very committed to Playa and to seeing that what is achieved there is what I originally had in mind,” Maguire said. “I want to increase my investment. What the actual deal would be, I have no idea.”
He described the potential Playa campus as “MGM (Plaza) elevated to a different power.” With the Westside market so hot, Maguire said he plans to start construction on a couple of 150,000-square-foot speculative buildings this year, in addition to rehabbing several old industrial buildings at the site.
That’s not all. Maguire plans to expand Plaza Las Fuentes in Pasadena with 350,000 square feet of additional office space. He is interested in doing a major hotel and mid-rise office project in Glendale. And in Santa Monica, Maguire is building a 100,000-square-foot retail-office project on Ocean Avenue.
And finally, in downtown L.A., Maguire is in the process of purchasing Dai-Ichi Life Property Holding’s interest in Gas Co. Tower and taking control of that property.
Downtown Renewal
In a shot in the arm for downtown Los Angeles, Union Bank of California N.A. has renewed its lease for 10 years at its Southern California headquarters at 445 S. Figueroa St. The bank’s current lease has two years remaining, meaning it will remain at its present location for at least a dozen years.
“They’re taking advantage of labor, location and access,” said Robert Ortiz of Cushman Realty Corp., who represented the bank. “There’s no question, downtown’s a good place to be for this type of employer.”
Although the bank is based in San Francisco, the chairman and vice chairman of the board are based in L.A., along with the bank’s charitable foundation. With more than 327,000 square feet and 775 employees in downtown, Union Bank is one of the largest corporate tenants left there. It occupies space on 22 floors of the 40-story building, where it has been since 1967.
Peter Johnston of Commonwealth Partners served as leasing agent for the building’s owner, a joint venture between Nippon Life Insurance and Equitable Life Insurance.
Pacific Financial Center Deal
Walter Conn, owner of Charles Dunn Co., bought a 50 percent ownership stake in the Pacific Financial Center at 800 W. Sixth St.
He purchased the interest for an undisclosed sum from Capital and Counties USA, which had owned the 17-story office building since it was built in 1973.
Charles Dunn moved its headquarters to the building seven years ago, occupying 26,000 square feet. The firm also handles leasing and management for the property.
“It has an outstanding location and the building is a jewel box,” said Conn.
It’s 92 percent occupied, with tenants in industries ranging from telecom to Internet to banking and insurance.
Downtown Lofts
Tom Gilmore isn’t the only developer converting old commercial buildings into lofts in downtown’s historic core. Real estate investor Izek Shomof is converting the old, vacant Barclay Building at 641 S. Spring St. to 37 live-work lofts.
Shomof said he purchased the 1920s-vintage office building nine years ago and it has been vacant for 25 years. He said the time is ripe to transform an area of urban blight.
“Basically, (it’s) the right opportunity and the area is becoming a little more exciting,” Shomof said.
Shomof is also buying an apartment building next door, called the Premier Tower, for $4 million from the Community Redevelopment Agency. The City Council is expected to vote on the sale early this week. If the deal is approved, Shomof would then be able to use the Premier Tower’s 120-space parking garage for both buildings.
Terminal Annex Buyer Chosen
A Dallas-based developer is expected to be named early this week as the winning bidder for downtown’s Terminal Annex. Nexcomm Capital Partners is buying the post office property for $39 million, sources said.
Nexcomm also owns the Infomart-Dallas, a 1.6 million-square-foot complex for telecom and Internet firms.
While L.A. officials have opposed transforming the 60-year-old building into a telecom switching station, Nexcomm apparently would turn it into a tech center that includes both a telecom component and possibly a job-intensive call center operation.
The building was the city’s main postal facility until 1989 and is still owned by the U.S. Postal Service.
Leasing Note
Hollywood Stock Exchange subleased 24,000 square feet at 8441 Santa Monica Blvd. in West Hollywood, where it will move from Santa Monica. The property is master leased to property developer Richard Weintraub. Jim Tagliere of Excel and Kevin Tamura and Giann Vitale of Daum Commercial Real Estate Services handled the three-party transaction valued at $6.4 million.
Staff Reporter Elizabeth Hayes can be reached at (323) 549-5225, ext. 229, or at [email protected].
